District of Columbia General Hospital and the district's health clinics would be controlled by a public benefits corporation, removing the struggling facility from direct government management and reducing government subsidies, under a measure advanced by Mayor Marion Barry.
The plan, which still must be approved by the district City Council, also would integrate care in the health clinics and hospitals, steering many minor cases out of D.C. General to less-costly primary-care practitioners at the district's 11 health clinics.
Barry said the plan would allow the district to reduce its $77 million subsidy to D.C. General and the clinics in fiscal 1996, which ends Sept. 30, to $68 million in fiscal 1997, declining sharply in the years after that.
Meanwhile, healthcare financing officials are warning that the district will not be able to save more than $1.5 billion from its Medicaid budget between fiscal 1997 and 2000 as projected earlier by district officials.
Paul Offner, the district's commissioner of healthcare finance, estimates that the district can save only about $691 million over that time. The mayor's plan, developed by an outside consultant, assumes the district can cut per-capita spending from more than $4,900 in fiscal 1995 to less than $3,700 in fiscal 2000.
Barry's plan estimates that Medicaid spending will rise to $1.3 billion in fiscal 2000-$622.8 million less than projected under current law-from $900 million in fiscal 1997.